Prelude

Without understanding of China’s politics, then it’s impossible to understand China’s economy. Starting from the last year of the ominous China’s economy, I also got much more interested in macroeconomics, or, I got interested in for the first time in my life. Of course, I think English helps a lot in terms of cultivating my interest, which I don’t have to read about written in a monotonous CCP’s language.

This is a book showing several important periods of transition and development, terminologies of the Party and the economics, historical background and factors, logics of how it develops and works, etc. Although the PRC’s economics and politics are closely associated, this book focuses more on economic sides. So, whether your political spectrum is more pro-CCP, neutral, or pro-democracy, this book is beneficial for everyone who wants to know and understand China’s economy about where should and would it go. In fact, if you take closer to think about its publication date and the contents written in the book, you can see the author even “predicted” the future to some degree, which requires you to know clearly about the current situation.

It also takes time to read, considering its terminologies, background and complexity. If I could borrow a word from Mandarin to describe its category, I would use “通识”, stands for liberal education in English. If there’s no other book surprises me this year, I think this will be my “The Book in 2024”. Anyway, hope you enjoy it.

Excerpt

The following is extracted from the book that I think they’re interesting, combined with some other materials I researched.

条块关系& 四套班子

The departments’ relationship can be called “vertical strips and horizontal blocks” relationships, namely, “条块关系”, in the China’s unique political structures consisted by the “four teams”, namely, “四套班子” : party committees, administrative government, the National People’s Congress and the Chinese People’s Political Consultative Conference.

The “four teams” structure is replicated at each level of the government, with a few notable exceptions. For example, the central government has the Ministry of Finance, the provincial government likewise has a finance department and the city and county government has a finance bureau.

Most local government departments have to accept dual leadership from both stripes and blocks. As an example, a county-level education bureau needs to accept the leadership of both the city education bureau vertically and the leadership of the county-level party committee and county government horizontally. In this example, the “strip” means the higher department and the block means the party committee and the government in the same level.

属地管理 & Externality

The geographical scope and authority of China’s local government is determined by administrative districts, and the extent of local power is bound together with the administrative district in question (属地管理).

Division of Administrative Districts

Factors: Languages, population

Areas of population inflow can merge counties and establish districts to expand the city, however areas of population outflow rarely abolish administrative districts, preferring instead to merge facilities to save cost (e.g., merging two schools together).

Regions located at the boundary of administrative districts tend to be underdeveloped. This phenomena, known as “三不管地带” roughly translated as “anarchic regions”, can also be explained using the framework of scale effects and boundaries of public goods. Interestingly, such problems are also existed in the ROC era, moreover, these anarchic regions provided a fertile space for the Communist party during the revolutionary period(1921-1949). Such phenomenons were demonstrate on roads a few decades, but this is limited to roads and expressways invested by the provincial government, not national roads and railways. Now, traffic is not a major problem. Some provinces choose to locate factories and businesses that have a high level of water pollution on downstream provincial borders, in doing so the pollution released mainly affects the downstream province and the average level of pollution in the polluting province may actually decrease.

To solve the anarchic regions problem, the best way to manage the cross-district externalities is to appoint a supervisor with authority to coordinate and make decisions. This is why strips and blocks systems are needed.

文山会海

According to the most recent regulations on the handling of government and party documents issued by the State Council in 2012 (which I will refer to here as “the regulations”), there are 15 types of official document. These include “Decisions” and “Orders” which must be strictly implemented by lower levels, those that can be handled relatively flexibly, such as “Opinions” and “Notices”, as well as those which have less information content such as “Letters” and “Minutes”.

七通一平

Before the firm moves in, the local government will make some initial investments in the area, including providing electricity, transport links, heating, ventilation, supplying water, drainage and communication networks, and the land must be leveled as well. (a process known in Chinese as “七通一平” which translates to “7 openings and 1 leveling”).

三免三减半

Local governments can also provide tax incentives or subsidies for certain businesses. Examples may include tax credit for research and development or subsidies on export. One common tax incentive involves businesses paying no corporate income tax for the first three years of operation and paying half the rate for years 3 to 6 (known as the “three tax-free and three half-tax” or “三免三减半”).

The reasons why land finance became such prominent, namely, the surging price of houses

However, in 1998, two significant changes occurred, and the true value of urban land began to emerge. The first change is that government and state-owned enterprises (SOEs) stopped building housing for their workers, and instead paid money to the workers in the form of a housing subsidy. The era of commercial housing and real estate development therefore started in earnest. From 1997 to 2002, the average annual growth rate of newly constructed residential areas reached 26%, and the absolute number increased 4x in 5 years. The second change is that the implementation of the revised “Land Administration Law of the People’s Republic of China” which stipulated that rural land could only be used for non-agricultural construction purposes if it is first transferred to state-owned land, thereby giving city governments a monopoly over urban land construction.

Land Finance & Debt & Snowball

The real power of “land finance” is not the high sales value of land use rights, but its ability to use land as collateral to mobilize capital markets and leverage up more funds for investment. It snowballs in size, leading to more and more investment, but also more and more debt for local governments, which has become a significant problem for China’s economy in recent years.

LGFVs(Local Government Financing Vehicles)

aka. 地方政府融资平台

However, the official name of these vehicles does not contain the word “financing”, rather most of them use words such as “investment and development” or “construction”, which emphasizes the company’s role in investment rather than financing. So in China, these vehicles are also collectively referred to as Urban Investment Corporations (城投公司).

To use some Chinese terminology, a piece of “raw land” (生地) that has been marked for development, can turn into “ripe land” (熟地) ready for development, only after the land is leveled and cleaned up.

Government industrial Guidance Funds / Private Equity Funds

Local governments cannot borrow directly from banks, therefore urban investment corporations act as financing vehicles. Similarly, governments cannot make direct equity investments in capital markets, therefore it is necessary to set up a company to operate and manage the guidance fund.

These fund managing companies fall into 3 broad categories. The first group are wholly state-owned enterprises, such as Beijing Yizhuang State Investment, an investor in BOE. The second group are mixed-ownership companies, such as Shenzhen Capital Group Co. Ltd., which is entrusted to manage the huge Shenzhen Guidance Fund. The largest shareholder of this company is the Shenzhen city government, but it only holds a 28% share. The third category is more like CFLD discussed in the previous chapter. Guidance funds in small cities are small in scale, and local governments have neither the resources nor the expertise to establish special management companies for them, so they simply entrust the funds to private companies, such as Prosperity Investment Group.

Shadow Banking 影子银行

The bank may therefore create a so-called wealth management product that attracts household savings at a rate of 5%, entrusting the money to a trust company. Then the trust company lends the money to the real estate company. In this so-called bank-trust cooperation, the wealth management product created by the bank is not recorded as bank deposits, and the money entrusted to the trust company is not recorded as bank loans, so the entire transaction is not recorded in the balance sheet of the bank and is therefore not subject to bank regulations. This is a form of shadow banking.

Intro

For most of people, even who live in the PRC for years or decades, it’s still highly possible that the political structure couldn’t be understood, especially when it comes to the difference between the Party and the State, as well as I did.

This is the very first step of learning politics for me. And, I believe that it would also benefit others like I did, so I decide to publish and share it with you. Moreover, this is a part of a series. In the future, I would also try to learn other nation’s political structures, like US, AU, and ROC.

Notice: During the process of searching and learning, I’m aware of that even wikipedia did uncomfortable censorship to some degree, although it’s much better than BaiduBaike(百度百科) in the terms of tools of information collecting and resources. So, if you want to dive deeper, I highly suggest you learn and do research in English. Other than that, if you’re a bi-linguist, it would be much better, and the comparison of the context in two different languages would surely bring sarcastic joys for you.

Anyway, please enjoy it. You can e-mail me if you find out something wrong.

Preview

PDF Files

Update logs are included in the files.

Branches of Economics

• Divided by Scale
  • Macroeconomics
    • Branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole, rather than individual markets.
  • Mesoeconomics / Mezzoeconomics
    • In-between macroeconomics and microeconomics with a focus on the intermediate level of analysis.
  • Microeconomics
    • Branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of limited resources
• Divided by Types
  • Classical Economics
  • Behavioral Economics

Monetary Policy 货币政策

Unconventional Monetary Policy at the Zero Bound includes credit easing, quantitative easing, forward guidance, and signaling.

• QE, Quantitative Easing 量化宽松
• Credit Easing
  • Credit Easing and QE are similar, but have some difference.
• Helicopter Money,
  • Can sometimes be perceived as an alternative QE, when the economy is in a liquidity trap (when interest rates near zero and the economy remains in recession).
• QT, Quantitative Tightening, 量化紧缩
• Tapering (in economics), reduction of the quantitative easing program in the US
• Short-Term Interest Rate,
• OMOs, Open Market Operations, 公开市场操作
• Forward Guidance, 
• Credit Guidance (Broader), Window Guidance (interchangeable with the Informal Guidance)
  • Nuances between these three terminologies (to be posted)
• Reserve Requirements, 
• Exchange Requirements, 
• Collateral Policy, 
• Signalling, 

Types of Interest Rate

• Prime Rate, or Prime Lending Rate
  • LPR, Loan Prime Rate, 最优惠贷款汇率
    • Used exclusively in the mainland China, moreover, both Hong Kong and Macau do NOT use LPR, it is ONLY existed in the mainland China, in the terms of the world. Before LPR was introduced on Aug. 17, 2013, the mainland China used BLR, Benchmark Loan Rate, instead.
    • BTW, Laryngopharyngeal reflux is also LPR, or laryngopharyngeal reflux disease, LPRD
• Federal Funds Rate
  • Used in U.S.
• Repo Rate, 
• IBOR, Interbank Offered Rate
  • Libor, London Inter-Bank Offered Rate
• Bank Rate, aka. Discount Rate(in AmE), 
• Mortgage Rates
• APR, Annual Percentage Rate,
  • eAPR, effective APR
• AER, Annual Equivalent Rate, aka. the effective annual rate,
• Annualized Interest Rate

Fiscal Policy 财政政策

Notice the difference between fiscal policy and monetary policy.

Stock & Market & Financial Products

IPO, Initial Public Offerings, 首次公开募股

Financial Market 

• Primary Market, 一级市场, aka. 发行市场, 初级市场
• Secondary Market, aftermarket, follow on public offering, 二级市场, aka. 次级市场

Types of Financial Products  

• In broad terms 
  • stocks(股票), bonds(债券), options(期权), futures(期货), forwards, shares(股份), funds(基金), deposit(存款), trusts(信托), equity(股权), annuities(年金), insurance(保险), Derivatives(衍生品), 
  • Difference between forwards and futures
• More specific products
  • Snowball Products, hedge funds, 

Incompletely, there’re some financial products can be seen as zero-sum games, including futures, forwards.

Invest Strategy

• Global Asset Allocation 
• Portfolio

Indicator

Market & Business

• CPI, Consumer Price Index
• PPI, Producer Price Index 
• CCI, Consumer Confidence Index
• PMI, Purchasing Managers’ Index

Stocks

• S&P 500, Standard & Poor’s 500
• NASDAQ Composite

Government

• Nominal Anchors

Economic Situation

• Liquidity Trap
• Stagflation
• Hyperinflation
• Deflation
• Middle Income Trap
• Recession
• Fiscal Cliff
• Credit Crunch
• Balance of Payment Crisis
• Boom and Bust Cycle
• Structural Unemployment 

Apparatus / Organization

PRC

PBC(officially used by PRC) / PBOC(informal) / People’s Bank of China, 中国人民银行, 人民银行, 央行, 中国中央银行

CBRC, China Banking Regulatory Commission, 中国银行业监督管理委员会, 中国银监会, authorized by the State Council, except the territories of Hong Kong and Macau

• Bank
  • ICBC, the Industrial and Commercial Bank of China,
  • BOC, the Bank of China
  • ABC, the Agriculture Bank of China
  • CCB, China Construction Bank

U.S.

The Federal Reserve System / the Federal Reserve / the Fed (simplified),  美联储

Clearinghouse, 

Strategy

Island chain strategy
First island chain, second island chain

 

 

Weapon

Deterrence

MAD (Mutual Assured Destruction)

Nuclear proliferation

ICBM (Intercontinental Ballistic Missile)

Nuclear Submarine

 

 

Spy

Espionage, pilferage

 

 

Common Organization (Abbreviated or not)

KGB

USSR

The Pentagon

NATO

AUKUS

DARPA

MI5 (Military Intelligence, Section 5)

 

 

YouTube Channels

Johnny Harris

Matt’s 電玩之夜GameNight

Lex Fridman

RealLifeLore

 

 

More Related Pages

Lucas’s Politics Observation Diary

World Political System

P.R.C’s & CCP’s Political System

Terminologies

Phenomenon 

Stratosphere 

Echo chamber, information cocoons

xxx bubble

Strategy

Zero-sum game, non-zero-sum game 

Bilateral trade/connection

Geopolitics 

Political lobbying

Political system 

Authoritarianism, totalitarianism, autocracy 

The party

Opposition party, ruling party 

Political spectrum 

Bipartisan consensus, common ground

Common Party Name Abbreviation: CCP, KMT(mostly known)/GMD/NPC/CNP, DPP, TPP, GOP, Dems

The Power

XXX Authority

Policymaker, 

xxx administration, xxx’s administration 

News

Party media

News media, news agency 

Intelligence 

Think tanks 

Sounding board 

Achievement in 2023

At the beginning of 2023, I decided to started reading English books, being a method of learning English, meanwhile, and also being a means of broadening my horizons. I read one saying online said “if you’ve already established a reading habit in your native language, then reading a foreign language book to be as a tool of language-learning is possible, vice versa”. 

 

I established a reading habit when I was in college. Living under the China’s “teaching to the test” educational system, I, and I believe a lot of students like me, don’t like reading, partially because what we read are basically what the Big Brother wants and allows us to read. With my one-year observation with English, the universal and international language today, I believe the whole system just doesn’t encourage students to broaden their minds. 

 

Moreover, as CCP is tightening its control, the social and academic environment is both becoming more and more narrow. In this painful and withering process, I slowly realized that Mandarin being a language is so deeply contaminated in subconscious and hidden ways, especially for those people who use simplified Chinese. 

 

It’s like boiling the frog, yet the temperature is way too high. It’s really the time to read in English. 

 

 

 

 

Wild Swans by Jung Chang

If I have to choose one book to be the best book I read in 2023, then the book Wild Swans by Jung Chang should be the one. It was very late for me to realize the book is very famous outside of the mainland China. This book has several editions in different language. For most Chinese, I would recommend English and traditional Chinese editions, because, according to its author Jung Chang, although the simplified Chinese edition has never been officially published, and in the foreseeable future would never be, there’s a pirate simplified Chinese edition circulating in the mainland China, which is also a censored edition. The only one edition that is not censored is the traditional Chinese edition, which was published in Taiwan. So, I strongly recommend you to read the traditional Chinese edition if you think it’s bit of challenging to read the English edition.

 

You can get it via Z-lib, a website for downloading e-books for totally free, or you can get it from Amazon or Apple Book Store, if you know how. But to notice, the all pirate versions for English edition that circulate online contains several misspellings. So, reading it is kind of troublesome, although it’s not gonna impede your understanding.

 

 

Back to content itself, I think the majority of Gen-Z like me don’t fully understand the PRC’s history, especially under the strict information control by CCP. But after reading this book, every time when people talk about the China’s humiliation of history, I would think about the cultural revolution, the Great Leap Forward and other enormous political upheaval launched by Mao. How about the deaths caused by these political campaigns, because the number of deaths is dramatically higher than the killings by Japanese. 

 

Ruthless killing and invasion are truly disastrous for the whole world, but, meanwhile, does that mean those who involved in these political upheaval are way more ruthless than “disgusting” Japanese people, considering the corresponding deaths are remarkably higher, moreover, Japanese have already paid for their mistakes, while, someone’s picture is still hanging on there? This is only one very contradictory thing I realize. 

 

We learned from the history textbook that Culture Revolution is a “mistake”, which, according to my knowledge, this description about the Culture Revolution being a mistake is even changing now. Still, enormous questions and facts hasn’t been revealed. Correspondingly, justice has never been brought.

 

How this political campaign was mobilized and what’s the point for? How about the actual price for this mistake? How this deeply affected hundreds and thousands of families? How many people’s lives were ruined by this “mistake”? Did the authority really reflect on their mistakes? Such meaningful questions that have never been raised and you can never count on finding them in the textbook can now be seen in this book, and, of course, you can conclude your own answers.

 

My suggestion is every Chinese needs to learn our own history, especially for those who really think they’re patriotic.

 

There’s also one my personal assumption: in the process of reading, you may naturally compare the history to now, because you can find plentiful similarities can be shared. Then, I have a sentence that I read from the internet for you: “History doesn’t repeat itself, but it often rhymes.” by Mark Twain.

 

 

 

Red Roulette by Desmond Shum

I was so struggling when I run into a question, “What’s the best you read in 2023, if you have to choose one book?”. Although I previously recommend Wild Swans by Jung Chang being the Book in 2023, when I was still in the middle of reading it, I couldn’t decide one. This book is also overwhelming.

 

The only reason I rate this to be a secondary book in my 2023 is because it only includes a small part of era and mainly focus on Hu-Wen’s era, which is much less politically upside-down, compared to Mao’s era.

 

Red Roulette writes the recent history and hidden secrets about highest leaderships, all of which you cannot expect to find them online, even in foreign media news. It gives you a glance of how the system actually works behind the scenes. The political network, personal connections and “the red blood” are the core of ruling rules. I really like what the author, Desmond Shum, said on a podcast show: “I was like being an outsider, trying to get in insiders.” At this political point, I believe a lot of ordinary Chinese people are outsiders, ignoring the fact that we all live in China.

 

Every businessman in china is “white-glove” for the system, according to what he said on a podcast show called “百灵果” based in Taiwan he attended. To be a white-glove doesn’t need to involve high-level politics. If you’re an ordinary person, if you want to open a small business, like a small booth around the street corner, you need to bribe your local authorities for protection. And the authorities don’t need to be as big as government. You become a white-glove when you bribe the local auxiliary policeman. That says doing any business activities needs to be a part of system. Connection is so important. I have never perceived this from this angle, until I heard his words. I think, for people whoever want to do a business, this book is really helpful for comprehending the logic of business operation.

• 本工具为对应书《雅思王听力真题语料库（机考笔试第二版）》的自动检查错误的电子听写本，仅Apple独家表格app – numbers支持使用。
• 更多详细信息、使用说明、鸣谢等都在文件内。
• 本项目不定期更新，请以最新版本为准。

 

20231017

首发版本 chapter 05 及以后的版本存在少量错误

王陆语料库 机考笔试第二版 全自动批改听写本 v1.numbers

 

 

20231019

已检阅chapter 05 并修复少量错误

王陆语料库 机考笔试第二版 全自动批改听写本 v2.numbers

 

20231021

新增chapter 06

王陆语料库 机考笔试第二版 全自动批改听写本 v3.numbers

 

20240306

Unknown Updates with Plentiful Updates

王陆语料库 机考笔试第二版 全自动批改听写本 v4.numbers

Example 

01

“As a child’s self-esteem is undermined, his dependence grows, and with it his need to believe that his parents are there to protect and provide.”

— Excerpt from Toxic Parents by Susan Forward

 

02

Then came the arrest, and with it the fear of being questioned by the police.

— From the Internet 

 

Explanation

在这个句子01中，“his dependence grows”是主句，“his dependence”是主语，“grows”是动词。而前半部分的“As a child’s self-esteem is undermined”很好理解，即“随着/当孩子的自尊受到破坏”。本句的重点在后半句——”, and with it…”

 

首先，这个句型是独立主格结构，在独立主格中，with语句中的being常常会被省去，所以如果补充回来，这句话“完整”的应该为：
“As a child’s self-esteem is undermined, his dependence grows, and with it being his need to believe that his parents are there to protect and provide.”

 

其次，独立主格中的with句型中的with通常有表原因、表条件、表方式、表伴随、表时间等作用，在这里的with很明显是表伴随的作用。而and这一词也很简单，没有太多的延伸，即“而且”的意思。

而这里的it指代了前句中的“his dependence grows”或“his dependence”（看你喜欢怎么理解），并且如果当这里的指代不止一个的话，就不可以使用it而要使用复数形式的代词，例如them或者these。也就是说，在这种句型中，这里的it或者在其他例句中的them/these指代了前半句中提及的内容。

 

那么到这里，句子的理解就很清晰了：

随着一个小孩的自尊心被破坏，他对人的依赖也会增加，并且(and)伴随(with)着（it 指代的是 前文提及的 他对人的依赖）的是他对要去相信他的父母会保护他和会提供他生存的需求。

 

所以，这个句子乍一看很奇怪，在后半句中代词it和另外一个名词前后直接叠加出现，并且中间没有任何的动词或介词衔接。那么，为了便于理解（实际写作时还是应该省略），把being加上后，明白with在这里做伴随的意思，并且了解代词it/these/them指代的是什么，这个句型其实很简单（意思上有点类似along with 不过这个句型强调了指代的功能），甚至与中文句式的表达逻辑是一一对应的，并没有出现颠倒。

 

最后，例句2相信你也能自己想明白～祝你学习开心😄～